9 mistakes to avoid when starting a franchise

If you are considering starting a
franchise business, you have probably seen many sales launches recently.
Franchise teams create super sophisticated sales networks: websites, brochures,
sales representatives, etc., all working in sync, without stopping, to sell you
their franchise.

What you will not hear often is
that owning a franchise can be as risky as owning any other small business.
That is why today I bring the biggest mistakes that are always made when
creating a franchise and how they can be avoided.

Error # 1: Start under capitalized and poorly informed

Do not invest in a franchise where you could be under capitalized. Running a new business is challenging and not always immediately profitable. You must make sure you have enough capital to operate a few years with losses or few gains.

Also, not doing a complete job on
initial investigations and discovery calls is risky. You can also use many of
your assumptions and these can be quite close. However, I suggest you ask very
detailed questions during the discovery process and listen carefully to the
answers. Often, what is not said is as important as what is said. Make sure you
have the necessary capital before starting a franchise.

The main mistake may be to focus
on a business just because it is fashionable, rather than one that best suits
your interests, abilities and budget.

For example, with the retirement
of baby boomers, caring for the elderly is a flourishing market. The demand for
nursing home care in particular is likely to trigger in the foreseeable future.
But these facts sometimes obscure the judgment of potential franchisees, which
makes them overlook other potentially profitable industries for which they
might be more suitable.

In the case of care for the
elderly, although there are franchises that do not require a history of medical
care, you should be passionate about caring for the elderly in your community.
If you don’t have that passion, you better try something like cleaning / maid
services, where you still have low overhead and strong growth potential.

Take the time to research and
find a business model that is profitable and that you like. The last thing you
want to do is invest tens of thousands of dollars in franchise fees and
installation costs just to realize that this was not the right business for
you.

Error # 3: Underestimate the costs of starting a franchise in a business
plan

It is necessary to put together a
better business plan. You have to clarify the facts before making a
presentation to the investor. And don’t feel that you have to buy the best of
the best, buying used is also valid. Even then, plan to spend more than expected.

Error # 4: Do not follow the franchisor’s system

“Just follow the
system.” It is advice that you will listen to several times and although
in your mind you are doing it, maybe you really are not. FOLLOW THE SYSTEM.

After some time you can realize
that, your growth is not, where it should be and you will have to make
adjustments. Once you start following the system completely, you will achieve
the results you wanted when you first bought the franchise.

Error # 5: Not knowing how to delegate in a timely manner

A person cannot do everything. It
is important to realize this in order to evaluate which parts of the business
you will manage and for which areas you will need qualified personnel, to
support you in the development of the project. If you do not take this into
account in time it is possible that the burden will distract you and lose sight
of some tasks that are not being done properly. Do not be afraid to ask for
advice and delegate.

Error # 6: Become complacent in the marketing of your franchise

Never slow down your marketing
efforts, even when you start testing success. Don’t settle for complacency!
Your marketing efforts must be continuous. You must analyze the effectiveness
of each point of sale. Then you should share effective strategies with your fellow
franchisees.

Error # 7: Deviating unnecessarily from your franchise business plan

Do not unnecessarily deviate from
your business plan without a good reason. The biggest mistake to avoid is to
make general assumptions about your business. Before making changes, it is
necessary to do an investigation. Get as much data as possible to make good
decisions.

Do not assume that other people
with experience in the industry are always right or always wrong. Look at all
the problems, compare the pros and cons, then make a decision that fits your
business plan.

Error # 8: Think you know everything when a franchise starts

Do not fool yourself and think
that your “vast” business history will automatically turn you into a
successful franchisee. Learn from other franchisees. Promote relationships with
other franchisees in your area and throughout the country. You learn more from
franchisees in your area than you can imagine.

You can’t do it all yourself. If
you have done your homework, you should be part of a franchise system with a
good support structure. There must be resources to turn to for help, guidance
and advice.

Error # 9: Expect a franchise to be a business in a box

Many new franchise owners expect
to buy a business in a box, and expect that when they open that box they will
have customers waiting at the door of their home. For most franchisees, that is
not the case.

You must invest time and energy
in developing the franchise brand in the territory or region where you have a
license to operate. While the franchisor supports the franchisee, the
franchisee still has to dedicate time, effort and energy to grow the business
in the local market.

The advantage of having a
franchise is that you can avoid many of the mistakes that small business owners
make because there is a good support structure. This is especially true the
more mature a franchisor is.

Hi, I am Sagar Chowdhury; I am an entrepreneur, father, mentor and adventurer passionate about life. At this moment, I am working with depression and anxiety; here is my blogs how to recover from anxiety and how to fight with anxiety. I hope everyone will like my blogs.